This report offers an in‐depth analysis of the major economic developments in the music industry. It looks at music companies, and covers the production and distribution of recorded music, including online distribution, and the competition which these companies face from other online music providers. It also looks at the organisation of live performances and the exploitation of music copyright, though data on how these activities contribute to revenues in the sector are less systematically available. The analysis integrates data from this project’s statistical report and includes a database of the major music publishing companies plus two company case studies (EMI and Spotify). The report is divided into six chapters. Following the introduction in Chapter 1, Chapter 2 introduces the sector and its main economic and technological features. Chapter 3 analyses the value network of the music industry, identifying the transformations taking place in the value network and business model as a result of the on‐going digitization process. Chapter 5 identifies the main regulatory issues affecting the economic position of the EU music publishing industry. Finally, Chapter 6 weighs the strengths and weaknesses of the European music publishing industry against the opportunities and threats posed by digitization and the internet. The study is based on a review and synthesis of the available literature and reports and on official (Eurostat) and unofficial (trade organisations and consultancies) data on the music publishing industry.